The $100 billion dollar Indian multinational business, Tata Group has decided to remove its Chairman Cyrus Mistry. The board took this decision earlier this week in a secret vote. Mistry has, however, not taken it too kindly. According to early reports, he may even approach the courts. Ratan Tata, who was the Chairman before him, has decided to take over till a panel can find a replacement.
No reason was provided why the Chairman had to be removed. The panel has been given four months time to find a replacement. Just a few days before his ouster, Mistry had made a presentation of his vision for the group for the next 100 years.
Tata Group Business Interests
The Tata Group owns Tata Motors (NSE:TATAMOTORS) that makes Nano, the world’s cheapest car, trucks, buses, sedans, the Range Rover vehicles, and owns the Jaguar Land Rover. The group also owns Tata Steel (NSE:TATASTEEL) plants in India and Europe and has a turnover of $16 billion, and has interests in information technology, power, telecommunications, hotels, chemicals, tea, airways, and engineering.
The brands they own include Tata Consultancy Services, Jaguar, Land Rover, Tetley Tea, and Taj Hotels among others. There are more than 100 companies in the group.
First Time Tata Removes Its Chairman
Mistry, who is Irish-Indian, has been the group’s chairman since December 2012. His removal was completely unexpected. Tata Motors (NSE:TATAMOTORS) and the other businesses of the group do not replace the Chairman. They retire. It’s a first time for them. The founder, Jamsetji Nusserwanji Tata, who was also the first Chairman, served for 36 years. Later, Jehangir Ratanji Dadabhoy Tata was the Chairman for 53 years.
Ratan Tata himself has been the group’s Chairman for 21 years (1991-2012) till he stepped down at the age of 75 years, making the way for Mistry to take over.
Cyrus Mistry was the first Chairman who was not a member of the Tata family. However, his family is the single biggest shareholder in the conglomerate. Mistry was the sixth chairman in close to 150 years for the group.
The Tata group has been facing problems for a while. For instance, Tata Steel has been trying to sell their UK operations for some time now. Tata Power has made huge acquisitions but is still not profitable. There was dispute over selling off some of the group’s hotels as well. The group employs 660,800 people in India and overseas.